Zambian Finance Minister Situmbeko Musokotwane said yesterday that he hopes agreement with IMF staff will be reached for the country to receive emergency financial assistance by the end of the month.
During a virtual presentation to creditors and stakeholders which MakanDay attended, Musokotwane disclosed that the Ministry will be holding talks with the IMF this week with the aim of Zambia entering what is known as an Extended Credit Facility (ECF) program.
“We’re hoping we can get this agreement achieved by mid-November, but realistically, perhaps, even the last week of November,” he said.
“But of course, we all know that agreement with the staff is not yet a programme, because the members of staff of the IMF must first go and convince the IMF board that there is now a case for entering into a financed programme with the republic of Zambia,” he added.
The ECF provides countries in serious economic distress with financial assistance so that they move toward a stable and sustainable macroeconomic position. The programme can help catalyse additional foreign aid but it also comes with tough financial conditions.
Musokotwane said the “IMF programme is only a tool to get the country where we desire to be” but his government’s main objective is to lift the economic wellbeing of Zambians.
According to Musokotwane’s timeline, Zambia should reach agreement with the IMF board by the end of the first quarter of next year.
As part of the new government’s determination to ease its debt burden, medium term economic policies rest on four pillars – economic transformation and job creation, human and social development, environmental sustainability as well as good governance agreement.
The Minister assured creditors that discussions to thrash out arrangements for rescheduling Zambia’s $14.5bn debt burden will be done transparently with all creditors.
He said the country will resume active engagement with international creditors after the IMF board approval of the ECF program in the second quarter of next year. He said the negotiations will be based on four principles – transparency, collaboration, fair treatment across all creditors and consistency with IMF debt sustainability analysis.
To the IMF, Musokotwane said Zambia’s top priority was to attain debt sustainability and also to create employment.
Last week, Musokotwane delivered the new government’s first budget, with a promise to increase investment in health and education despite the country’s perilous debt position. He proposed to employ 30,000 teachers and 11,200 health workers to easy staff shortages in the two sectors next year.
This MakanDay article is in association with Finance Uncovered, a UK based journalism organisation